Sovos, the always-on compliance company, today announced a joint business relationship with the Belgian PwC Firm PwC Business Advisory Services bv/srl (hereinafter: “PwC”), leveraging the companies’ complementary tax and advisory service expertise and solutions to address vital e-invoicing and e-reporting needs.
Through this joint business relationship, Sovos and PwC clients can access comprehensive services to adeptly tackle the ever-evolving regulatory challenges linked to e-invoicing and e-reporting, as additional countries look to join the more than 80 countries worldwide with existing e-invoice requirements.
Through implementation of the Sovos Compliance Cloud, organisations will be able to identify and document client e-invoicing regulatory requirements across various markets, evaluate existing processes and technology, and align business objectives. Introduced in February, the Sovos Compliance Cloud is the industry’s premier unified, cloud-based tax compliance and regulatory software platform that provides a holistic system of record for global compliance.
“As companies navigate an increasingly interconnected and dynamic marketplace, the need for a more integrated e-invoice process has never been more crucial,” said Ellen Cortvriend, partner, of PwC in Belgium. “The Sovos joint business relationship allows us to deliver excellence in an e-invoicing-led global tax compliance project today, with the ability to streamline the e-invoice process even more over time.”
“With many clients of PwC in Belgium facing imminent e-invoicing mandates, the Sovos Compliance Cloud platform ensures a quick and successful integration,” said Alice Katwan, president of revenue, Sovos. “Rapid and complex compliance changes create both tax and IT challenges, from needing immediate tax determination at the point the invoice is raised, to the integration of validated e-invoices with periodic and SAF-T reporting. By reducing the operational burden and providing a singular data view into their compliance posture, Sovos and PwC allow companies to unlock tremendous business value.”
For business leaders seeking to understand more about the events driving regulatory changes and strategies to stay ahead of the compliance risk curve, PwC and Sovos compliance experts will host a complementary webinar, Have We Hit a Tipping Point for Global Indirect Tax?, on 11 April 2024 at 2 p.m. GMT. Registration is now open.
About Sovos
Sovos is a global provider of tax, compliance and trust solutions and services that enable businesses to navigate an increasingly regulated world with true confidence. Purpose-built for always-on compliance capabilities, our scalable IT-driven solutions meet the demands of an evolving and complex global regulatory landscape. Sovos’ cloud-based software platform provides an unparalleled level of integration with business applications and government compliance processes.
More than 100,000 customers in 100+ countries – including half the Fortune 500 – trust Sovos for their compliance needs. Sovos annually processes more than 11 billion transactions across 19,000 global tax jurisdictions. Bolstered by a robust partner program more than 400 strong, Sovos brings to bear an unrivaled global network for companies across industries and geographies. Founded in 1979, Sovos has operations across the Americas and Europe, and is owned by Hg and TA Associates. For more information visit https://dev.sovos.com and follow us on LinkedIn and Twitter.
About PwC
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 151 countries with more than 364,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.
From August 2024, e-invoicing in Malaysia will become mandatory for taxpayers with an annual turnover or revenue of more than RM100 million. The mandate will follow the continuous transaction control (CTC) model and will require e-invoices to be validated by the country’s tax authority, as well as reporting certain transactions. Rollout to all other taxpayers undertaking commercial activities in Malaysia will follow in 2025.
Read on for an overview of Malaysia e-invoicing requirements and bookmark this page to stay updated with the latest mandate developments.
The issuance of an electronic invoice and submission for validation to the IRBM’s Platform (MyInvois) will be mandatory in Malaysia for certain determined transactions (e.g. automotive, aviation, construction).
For transactions where e-invoicing is mandatory, and in all other transactions where the buyer requests the issue of an e-invoice, the supplier will need to issue an e-invoice in XML or JSON format and submit it to the IRBM´s MyInvois platform for validation.
To comply with this e-invoicing requirement, taxpayers can use the MyInvois platform through the free solution offered by IRBM or integrate through specific APIs. A Software Development Kit has been released by the IRBM for this purpose.
The platform will perform certain validation checks, not only to the e-invoice structure but also to Taxpayer Identification Numbers (TIN). Once the e-invoice receives validation from IRBM, buyers are allowed to submit rejection requests stating the rejection reason.
On the other hand, suppliers can agree to such rejections and issue cancellations of the e-invoice during a 72-hour period.
Following validation, suppliers handle the exchange of validated e-invoices. The exchanged e-invoice should include the original validated e-invoice, the validation link provided by the IRBM in the form of a QR code and a PDF copy.
The QR Code enables the verification of the existence and status of the e-invoice through the MyInvois portal.
Malaysia B2B e-invoicing
CTC Type E-invoice reporting.
Network E-invoices are processed via the MyInvois portal, however, they should be exchanged out-of-band.
Format XML or JSON.
eSignature Requirement Mandatory. Use of local certificates required.
Malaysia B2G e-invoicing
CTC Type E-invoice reporting.
Network E-invoices are processed via the MyInvois portal, however, they should be exchanged out-of-band.
Format XML or JSON.
eSignature Requirement Mandatory. Use of local certificates required.
E-invoicing in Malaysia: Key requirements and regulations
From August 2024, Malaysian taxpayers with an annual turnover or revenue of more than RM100 million will be required to submit and clear e-invoices for certain transactions.
Malaysia e-invoicing adopts a continuous transaction control (CTC) approach. E-invoices must be submitted and cleared via MyInvois, the e-invoicing portal of the Inland Revenue Board of Malaysia (IRBM).
As of the 9 February 2024, the IRBM guidelines state that mandatory e-invoicing will be for specific sectors and transactions.
Sectors in-scope of mandatory e-invoicing include:
Automative
Aviation
Luxury good and jewellery
Construction
Licensed betting and gaming
Payments to agents, dealers and distributors
For cross-border transactions, Malaysian taxpayers must issue a self-billed e-invoice to document the expense, but foreign parties do not need to implement the Malaysia e-invoicing system.
B2C transactions fall outside of the mandatory e-invoicing scope. Any e-invoices for transactions not in scope are subject to the buyer’s request.
What is an e-invoice in Malaysia?
An e-invoice is a digital representation of a transaction between a supplier and a buyer that replaces all paper or electronic documents serving as invoices, credit notes and debit notes.
An e-invoice under the new framework is a structured file created in a defined format that can be automatically processed by the relevant systems. The e-invoice structure includes 53 mandatory fields and must be submitted in either XML or JSON format.
An e-invoice will contain the same essential information as per current practices, such as supplier’s and buyer’s details, item description, quantity, price excluding tax, tax, and total amount.
Following the validation process, e-invoices must include an embedded QR code.
PDFs, Doc, JPG and paper will not be considered as e-invoices.
What is the process flow of an e-invoice in Malaysia?
E-invoice issuance: Taxpayers must submit e-invoices to the IRBM via the MyInvois portal or through a third-party e-invoicing software API in XML or JSON format.
Validation: Once submitted, the e-invoice is validated in real-time and a Unique Identification Number, validation link (QR Code) and PDF format of the cleared e-invoice are sent to the supplier.
Validation notification: The IRBM performs certain validation checks on the e-invoice structure and on taxpayers identification numbers and notifies the buyer and supplier of the validated invoice.
E-invoice sharing: Suppliers should share the validated e-invoice and a visual representation with a QR code embedded. The QR code allows buyers to validate the existence and status of the e-invoice via MyInvois. It’s the supplier’s responsibility to share the document with the buyer.
Rejection or cancellation: Optional rejection (buyer side) and optional cancellation (supplier side) requests have a 72 hour time limit, after which the invoice is considered valid. Any corrections or amendments made after the 72 hour limit will need to be made through credit, debit or refund notes.
Transaction Summary: A summary of the transaction can be viewed via the portal.
What are the types of e-invoices in Malaysia?
In Malaysia, the e-invoice mandate covers the below document types:
Invoice
Credit note
Debit note
Refund invoice
Self-billed invoice
E-reporting regulations in Malaysia
For all other transactions that fall outside of the mandatory e-invoicing scope, and where the buyer did not request an e-invoice to be issued, suppliers can issue an invoice or receipt as per the current practices (e.g. paper).
However, in these cases, suppliers are required to instead issue a consolidated e-invoice aggregating all invoices and receipts on a monthly basis, within 7 days of the month end-. Consolidated e-invoices are common in Malaysia today, and this requirement allows this practice to continue, while still giving the IRBM access to aggregated transaction data. These consolidated invoice reports are issued to a ‘general public’, without specification of each buyer, and a general TIN is provided.
A description of the products or services is provided by the summary of each receipt presented as separate line items in the consolidated e-invoice and/or the list of receipts (in a continuous receipt number) presented as line items.
Additionally, when consolidated- e-invoices are issued, MyInvois will send notifications back to the supplier only. Rejections are not allowed from the buyer side and suppliers are not required to share the validated e-invoice with buyers.
Consolidation cannot be used for self-billed invoices.
Implementation timeline
2015: Malaysia introduces voluntary e-invoicing
October 2022: The Malaysian Ministry of Finance announces plans for e-invoicing pilot program for select taxpayers
November 2023: Mandatory e-invoicing implementation timeline is delayed to August 2024
February 2024: Inland Revenue Malaysia publishes Software Development Kit and e-invoicing guidelines
August 2024: Mandatory e-invoicing and clearance in Malaysia for taxpayers with an annual turnover or revenue of more than RM100 million (aprox. 20 million euros)
January 2025: Mandatory e-invoicing for taxpayers with an annual turnover or revenue between RM25 million (aprox. 5 million euros) and RM100 million
July 2025: Mandatory e-invoicing for all taxpayers
Setting up e-invoicing and e-reporting in Malaysia
Malaysia’s e-invoicing mandate allows submission of e-invoices via a third-party API. Sovos’ e-invoice and e-reporting compliance solutions are suitable for Malaysia and other international tax requirements.
Speak with a Sovos expert to set-up e-invoicing in Malaysia.
Complete the form below to speak with one of our e-invoicing experts
E-invoicing will become mandatory for certain transactions for taxpayers with an annual turnover or revenue of more than RM100 million from August 2024. Additional taxpayers will be in scope from 2025 with all taxpayers included by July 2025.
There is a consolidated e-invoice requirement for transactions where e-invoicing is not mandatory, and the buyer does not request an e-invoice to be issued. Taxpayers must aggregate all invoices and receipts issued and issue a consolidated e-invoice via the MyInvois, on a monthly basis (within 7 days from the month end).
E-invoicing is currently optional for taxpayers in Malaysia but an upcoming mandate will make it a requirement for all taxpayers by 2025. The first group of taxpayers need to comply by August 2024.
The Inland Revenue Board of Malaysia (IRBM) is the e-invoicing authority in Malaysia. The IRBM is responsible for the MyInvois Portal, the platform used to submit, clear and validate e-invoices in the country.
Taxpayers within scope of the e-invoicing mandate submit documents via the country’s MyInvois Portal for validating, before sharing with the buyer. The real-time e-invoicing process saves time and resources for businesses and facilitates cross-border and international trade.
The Dominican Republic is just one of the many nations that are turning to e-invoicing. From 2024, established taxpayers will be required to meet strict new rules for how they execute business transactions.
Understanding what’s to come is vital, as is choosing a partner with the technical know-how and foresight to ensure compliance during change. Bookmark this page to stay updated with developments in e-invoicing in the Dominican Republic, written by regulatory experts.
At a glance: e-invoicing in the Dominican Republic
Dominican Republic B2G e-invoicing
CTC Type E-invoice clearance according to the calendar, starting with the first group in May 2024
Network The system’s web services are a set of protocols and standards that, using extensible markup language (XML) and REST API, allow the exchange of data between the heterogeneous invoicing software of taxpayers and the tax authority through an environment defined as {Environment}, finding various services in electronic invoicing
Format Electronic invoices will be sent in an XML file, which consists of a plain text record that uses a series of custom tags to describe both the structure and other characteristics of the document
eSignature Requirement A digital certificate for Tax Procedure, issued and signed digitally, by a certification entity authorised by INDOTEL or a certificate with an institutional link is required
Archiving Requirement 10 years
Dominican Republic B2B e-invoicing
CTC Type E-invoice clearance according to the calendar, starting with the first group in January 2024
Network The system’s web services are a set of protocols and standards that, using XML and REST API, allow the exchange of data between the heterogeneous invoicing software of taxpayers and the tax authority through an environment defined as {Environment}, finding various services in electronic invoicing
Format Electronic invoices will be sent in an XML file, which consists of a plain text record that uses a series of custom tags to describe both the structure and other characteristics of the document)
eSignature Requirement A digital certificate for Tax Procedure, issued and signed digitally, by a certification entity authorised by INDOTEL or a certificate with an institutional link is required
Archiving Requirement 10 years
E-invoicing regulation in the Dominican Republic
The electronic invoicing regulation in the Dominican Republic was published on 17 May 2023 and lays out the specific expectations and requirements for taxpayers.
Firstly, the e-invoicing regulation applies to natural and legal persons, both public and private. It also applies to entities without legal personality domiciled in the Dominican Republic that carry out the transfer of goods, delivery in use or provision and lease of services for consideration or free of charge.
All issuers of electronic invoices are to be recognised and authorised as such by the DGII and have a digital certificate for Tax Procedure issued by an entity authorised by the Dominican Institute of Telecommunications (INDOTEL).
Electronic invoices must be compliant with a set format and are to be sent to the authority and electronic receiver. Each e-invoice will have a Printed Representation (RI) of the electronic tax receipts (e-CF) which will be delivered physically to exceptional non-electronic receivers.
The regulation outlines three forms of acceptable e-CF issuance:
Using self-developed systems, following authorisation from the DGII
Using e-invoicing service providers that have been certified for compliance
Using the DGII’s free technological facility (known as free billing)
Timeline: e-invoicing adoption in the Dominican Republic
It can be difficult to stay informed about the changes to e-invoicing’s implementation in the Dominican Republic. This simple timeline details the key developments:
February 2019: Pilot phase for e-invoicing commences with 11 large companies
September 2022: Draft law filed for the Senate’s approval
18 May 2023: The e-invoicing mandate became applicable across the nation
15 January 2024: Group 1 of large national taxpayers need to have implemented e-CF by now
15 March 2024: Group 2 of large national taxpayers need to have implemented e-CF by now
15 May 2024: Group 3 of large national taxpayers and Government Institutions classified as Large National Taxpayers need to have implemented e-CF by now
15 May 2025: E-invoicing will become a requirement for large local and medium-sized taxpayers
15 May 2026: E-invoicing will become a requirement for small, micro, unclassified taxpayers and the remaining Government Institutions
Who must use an e-invoice in the Dominican Republic?
Both issuing and receiving electronic invoices are currently voluntary for both B2B and B2G transactions in the Dominican Republic. This will change in 2024 when the first wave of mandatory requirements rolls out, specifically to large taxpayers.
View the timeline below to find out exactly when e-invoicing will be obligatory for different taxpayer groups.
How to choose the right e-invoicing software in the Dominican Republic
The impending launch of electronic invoicing in the Dominican Republic brings along the need to find a system and strategy that works. Strategy isn’t one-size-fits-all; compliance is imperative and, subsequently, so is finding a solution that understands your company.
Sovos is a global compliance partner for organisations of all shapes and sizes, and our solutions not only help you to comply but also free up resources so you can focus on what really matters.
Another aspect of compliance to be mindful of is that requirements change. It’s unavoidable. Instead of jumping between solutions, organisations that partner with Sovos have peace of mind that they will be compliant in the present and meet any new demands that come in the future.
e-CF, otherwise known as an electronic tax receipt, is the Dominican Republic’s version of an electronic invoice. Taxpayers must submit e-CFs to the nation’s tax authority, DGII, for approval.
Once you have issued an electronic invoice, request an e-CF sequence and the DGII will validate the file. Once the tax authority has validated the e-CF, you will receive authorised versions.
Regarding e-invoicing in the Dominican Republic, the Acknowledgement of Receipt only confirms that the electronic invoice has been received. The Commercial Approval indicates whether the e-CF has been accepted or rejected.
In less than six months, Poland is going to introduce its long-awaited CTC clearance e-invoicing mandate – a tax reform that will impact a large amount of businesses.
It has been possible to issue and receive e-invoices voluntarily via Krajowy System E-Faktur (KSeF) since January 2022, but from 1 July 2024 it will become mandatory for suppliers and buyers that are in scope of mandatory e-invoicing to do this via KSeF.
A detailed understanding of the new regime, plus timely and proper preparation, is critical for compliance. Whilst there is a six-month grace period on financial penalties, non-compliance can negatively impact your business in many other, often unexpected, ways.
In this 45-minute deep-dive webinar, Marta Sowińska from our Regulatory Analysis and Design team will cover:
Introduction to the mandatory e-invoicing reform in Poland
Scope of the clearance mandate: domestic vs. cross-border transactions
Key challenges:
B2B vs. B2C transactions
Latest updates on QR codes
Emergency models – also known as offline modes
Key dates and implications of non-compliance
Join us on 8 February at 2pm GMT | 3pm CET for a thorough review of the Polish KSeF e-invoicing mandate and the opportunity to submit your questions.
As tax authorities continue to digitize processes in their mission to reduce fraud and close their VAT gaps, they are introducing requirements that provide greater visibility into a company’s financial operations in the form of Continuous Transaction Controls (CTC).
It would be a mistake to think that being prepared to meet obligations in one of the countries where you operate can simply be replicated in another – CTCs are far from a ‘one-size-fits-all’ solution.
Join us on 24 January 2024 in our latest quarterly VAT Snapshot webinar series where regulatory experts Dilara Inal and Marta Sowinska will examine how tax authorities in Poland, Romania, Israel, Greece and Spain – all simultaneously implementing CTC regimes – are doing so with different sets of requirements.
Don’t miss this opportunity to learn more about these unique regimes and what they mean for your business.
Poland is one of many countries to use the Standard Audit File for Tax (SAF-T) to streamline tax compliance and reporting for businesses. The country was one of the first in Europe to replace the traditional VAT return with SAF-T.
Poland introduced its version of SAF-T, known as Jednolity Plik Kontrolny (JPK), in 2016, making monthly submissions of JPK_VAT compulsory for all taxpayers in 2018.
In 2020, JPK_VAT combined with the VAT return and is submitted with a declaration per the frequency of the VAT Return (monthly or quarterly).
Submission of the remaining seven JPK structures is upon request of the tax authority in the event of an audit.
The Poland SAF-T framework consists of eight JPK structures:
JPK_V7M/K
declaration for records of VAT purchases and sales combined
JPK_FA
for VAT and VAT invoices
JPK_WB
for bank statements
JPK_PKPIR
for revenue and expense ledger
JPK_EWP
for revenue account
JPK_KR
for accounting books
JPK_MAG
for warehouses
JPK_FA_RR
for flat rate VAT invoices
Other than the monthly or quarterly periodic submission of JPK_V7M/K, submission of all other JPK structures is on demand.
However, from 1 January 2025, reporting of JPK EWP, JPW PKPIR, and JPK_KR will become a periodic reporting obligation.
Timeline SAF-T in Poland
1 July 2016: SAF-T introduced in Poland in the form of JPK files
1 January 2018: Poland mandated JPK_VAT for all taxable persons
1 July 2018: Taxpayers must be able to produce accounting documents in JPK structures
1 October 2020: JPK_VAT with declaration consolidates the VAT Return and JPK_V7M/K
1 July 2021: Amendments to the mandatory JPK_V7M/K adopted
1 January 2022: Amendments to the JPK_V7M/K structure including changes to better align it with the EU VAT e-Commerce package
1 January 2025: Reporting of JPK EWP, JPW PKPIR, and JPK_KR becomes a periodic obligation
Understanding JPK VAT and SAF-T in Poland
One of the eight JPK structures in Poland is JPK_VAT, a declaration combining VAT purchase and sales records. As of 2020, JPK_VAT must be sent alongside VAT returns to the tax authority.
JPK_VAT with the declaration has two variants, depending on the submission frequency of the VAT return:
JPK_V7M for taxpayers settling VAT monthly.
JPK_V7K for taxpayers who settle VAT quarterly.
Submission of JPK_V7M and JPK_V7K is on the 25th of the month following the reporting period.
The other SAF-T JPK structures for VAT are JPK_FA for VAT invoices and JPK_FA_RR for flat-rate VAT invoices. JPK_FA and JPK_FA_RR are both submitted on demand.
Implementing SAF-T as a business
SAF-T requires additional data to analyse and authenticate the accuracy of documentation. All data submitted in the SAF-T consolidated submission must be accurate and complete to ensure compliance.
Data for SAF-T requirements is often extracted from multiple sources for a single report and combining this data can be difficult.
The data required for SAF-T differs significantly from other reporting obligations that businesses might be familiar with. The XML format required for reports makes it difficult to review, compare or test reports ahead of submissions.
As well as Poland’s SAF-T requirements, taxpayers need to also be aware of the KSeF e-invoicing mandate. Poland’s continuous transaction control (CTC) e-invoicing system is mandatory as of 1 July 2024, expanding to VAT-exempt taxpayers in 2025. Read this overview for a general introduction toPoland VAT compliance.
JPK_VAT with a declaration is an electronic document that includes both VAT records, combining information on purchases and sales and VAT returns (VAT-7M and VAT-7K).
Yes, SAF-T is mandatory in Poland. JPK VAT with a declaration must be sent to the tax authority on a periodic basis, while other types of JPKs are sent on demand.
Failure to comply with the SAF-T requirements in Poland can lead to penal and fiscal sanctions, based on a misdemeanor or a felony. If the value of the reduction of the tax liability exceeds PLN 10,000, it is a crime.
Submission of JPK_VAT with the declaration (JPK_V7M and JPK_V7K) is on the 25th day of the month following the reporting period. Other JPKs are submitted to tax authorities within three days after receiving a request from the tax authority.
Our Solution capabilities for Poland SAF-T
Data Extraction
Painlessly aggregate and consolidate data from a wide range of source systems complying with Poland’s SAF-T requirements including JPK files.
Check the accuracy, integrity and quality of complex data structures required by Poland SAF-T to give you peace of mind before you submit your JPK files to the tax authority.
Ensure that all required data sets from accounting entries, sales and purchase transactions, asset depreciation, stock movements and more, are mapped seamlessly into Poland’s JPK schema, ready to be analyzed and submitted to the tax authority.
E-invoicing in Romania is developing fast. With a current B2G and High Fiscal Risk B2B mandate already in place and a new obligation facing all companies with operations in Romania from 1 Jan. 2024, it can be hard to stay on top of your business’ requirements. Failing to comply with Romania’s e-invoicing and e-reporting mandates will result in penalties, but more importantly, it will lead to invalid tax invoices – which don’t allow for VAT deduction – and, ultimately, may also trigger protracted tax audits, so it is crucial that you are aware of your requirements.
CTC Type E-invoice clearance coupled with e-reporting requirements for transactions carried out between January and July 2024 with public institutions
Network Centralised network where the e-invoice exchange is primarily processed through the RO e-Factura platform
Format UBL 2.1 XML format file following CIUS RO national validation rules
eSignature Requirement Digital Seal applied by the Ministry of Finance
Romania B2B e-invoicing
CTC Type E-invoice clearance coupled with e-reporting requirements for transactions carried out by VAT-registered entities
Network Centralised network where e-invoice exchange is primarily processed through the RO e-Factura platform
Format UBL 2.1 XML format file following CIUS RO national validation rules
eSignature Requirement Digital Seal applied by the Ministry Of Finance
Archiving Requirement 10 years
E-invoicing and e-reporting regulations in Romania
Romania introduced e-invoicing on a voluntary basis in November 2021 for B2G and April 2022 for B2B transactions. Romania’s Government Emergency Order no. 120/2021 implemented the RO E-Factura platform, the country’s e-invoicing system.
From July 2022, e-invoicing became mandatory for B2G and B2B transactions of so-called ‘high fiscal risk products’ following article II of Law no. 139/2022.
Romania applied for a derogation from the EU VAT Directive, aiming to implement a broader B2G and B2B e-invoicing and e-reporting mandate. The EU Council granted derogation in July 2023, allowing Romania to implement mandatory e-invoicing from 2024. The enacting of Law no. 296/2023 provides a new B2G and B2B e-invoicing mandate coupled with e-reporting requirements.
What is RO e-Factura?
RO e-Factura was officially launched in November 2021 as a voluntary clearance program for e-invoices, devised in an effort to streamline Romania’s tax collection. Users of e-Factura issue and submit their electronic invoices in a structured XML format through the system. Invoices are then cleared (following certain schema checks) and a digital seal is applied.
The RO E-Factura platform enables the automatic exchange of electronically issued invoices between entities registered in the system.
Romania B2B e-invoicing and e-reporting
B2B e-invoicing is already in play for transactions that include products deemed a high tax risk, including:
Fruit and vegetables
Alcoholic beverages
Mineral products
Construction materials
Clothing and footwear
Following the recently published mandate, B2B e-invoicing requirements will extend to all products. From January 2024, established and VAT-registered entities are required to report B2B domestic transaction invoices to the RO E-Factura platform within five days of issuance. From July 2024, invoices issued in transactions between established entities must be issued electronically through the RO E-Factura platform.
If, however, taxpayers fail to issue the invoice electronically through the RO E-factura platform, they are obligated to submit it to the RO e-Factura platform within five calendar days.
Romania B2G e-invoicing
From 1 July 2022, Romanian taxpayers were obliged to issue e-invoices, submitting them through the RO e-Factura system, when conducting business with the public sector. This obligation was namely within the context of certain public procurement contracts.
Romania’s e-invoicing mandate has expanded the scope of B2G invoicing in Romania which will apply to all transactions with public institutions from 2024.
Romania e-Transport system
Romania’s e-Transport system, often referred to as RO e-Transport, is used to monitor products when they are being transported. Coupled with the implementation of the CTC mandate, this is another reform that the nation has devised as part of its plan to combat tax fraud and evasion.
The application procedure of the RO e-Transport system has been approved by the joint Order of the National Agency for Fiscal Administration (ANAF) and the Romanian Customs Authority (AVR) no. 1190/4625/2022, with penalties applicable from October 2022.
The RO e-Transport system requires taxpayers to declare the movement of goods from one location to another, in advance of said movement. Once declared, it issues a number on the transport documents which is to be verified by authorities en route.
Timeline: e-invoicing & e-reporting adoption in Romania
The implementation of e-invoicing in Romania has been done in stages. This is a brief timeline of its adoption:
March 2020: E-invoicing system e-Factura is launched as a pilot program
October 2020: Government Emergency Ordinance (GEO) no. 120/2021 introduced the legal framework for the implementation of e-Factura
November 2021: Start of the voluntary phase for issuance of e-invoices for B2G transactions
April 2022: Invoices for B2B transactions of high fiscal risk transactions can be voluntarily submitted in e-Factura
July 2022: It is now mandatory to issue invoices for B2B transactions of high fiscal risk products through the RO e-Factura platform
January 2024: For B2B transactions, established taxable persons and VAT registered entities must report invoices in the e-Factura system within five days of issuance
April 2024: End of three-month grace period for e-invoicing mandate. Penalties will apply to non-compliant taxpayers
July 2024: The system will shift to an invoice clearance system for B2B transactions between established taxpayers
1 July, 2030: Romanian VAT-registered businesses must comply with VAT in the Digital Age (ViDA) requirements, which include mandatory e-invoicing and digital reporting for Intra-Community B2B transactions.
Benefits of e-invoicing
From a business perspective, e-invoicing offers several benefits when compared to traditional invoicing. Benefits may include:
Saving costs by reducing paper, postage and manual labour
Saving time by using structured, automated electronic systems and processes
Increased compatibility and interoperability across businesses with initiatives like PEPPOL
Enhanced security can be achieved with the validation and authentication of systems like e-Factura
How to choose the right e-invoicing software in Romania
Considering the ever-evolving nature of regulations and mandates surrounding newer technologies and platforms like RO e-Factura, it is important that your business identifies and utilises the right software. The cost of using e-invoicing software that does not update with changes to regulations is not desirable for any organisation.
Setting up e-invoicing and e-reporting in Romania with Sovos
Get in touch with a Sovos expert to explore setting up e-invoicing and e-reporting in Romania.
The future of e-invoicing in Romania has already arrived. Following the EU Council’s derogatory decision to allow Romania to implement mandatory e-invoicing, Romania published a more comprehensive B2B mandate with a 2024 roll-out date. The new law requires businesses to issue structured electronic invoices for transactions to both business and public sector entities, and it applies to established and VAT-registered entities.
The looming implementation of VAT in the Digital Age in the EU may deliver more changes in Romania, however. Aiming to digitise the European VAT system, this proposal is generating a lot of uncertainty for businesses that conduct operations in the EU as it includes requirements for digital reporting and e-invoicing – as well as changes to VAT registration
While the future of tax in the European Union may be uncertain, you can rely on Sovos to help you navigate the digital landscape. Bookmark this page to stay up to date with the latest developments.
Additional obligations for VAT compliance in Romania
While it’s important to ensure your business complies with Romania’s e-invoicing requirements should it qualify, there are other obligations that require attention – including general VAT Compliance and the Romanian SAF-T mandate.
The cost of non-compliance may be severe, but our materials and experts can be the helping hand you need to ensure you are meeting your obligations.
E-invoicing will be mandatory for all B2B transactions in Romania from 1 July 2024, adding to the existing electronic invoicing requirements for B2G and high fiscal risk B2B transactions.
Between January and June 2024, established entities are required to report their B2B invoices to the RO e-Factura platform within five days of issuance. This reporting obligation applies to VAT-registered entities from January 2024 onwards.
Should a taxpayer in scope of the e-invoicing and e-reporting mandate not comply with its e-invoicing obligations, they may receive a fine. From April 2024 (at which time the 3-month grace period ends) 2024, large non-compliant taxpayers may be fined between 5,000-10,000 RON, and others may expect a financial penalty between 500-2,500 RON, when failing to meet the e-reporting requirements set forth. From July 2024, non-compliance with the with the issuance and receipt of e-invoices will result in a fine equal to 15% of the total invoice amount.
As CTCs and e-invoicing continue to grow in global adoption, it is vital to partner with a provider that closely monitors the decisions of tax administrations and understands the regulations you face. Sovos can help.
One of the largest spirits companies in the world, Brown-Forman turned to Sovos for help with several challenges it was facing surrounding changing e-invoicing regulations. The company needed a solution that would monitor and implement the fiscal requirements of the countries it operated in.
With Sovos e-invoicing compliance in place, Brown-Forman was able to redeploy its resources to core business functions knowing that its e-invoicing requirements were being met – both in the present and the future.
Since 2022, medium and large taxpayers in Romania have had to report their VAT electronically to the tax authority under the international standard known as SAF-T (Standard Audit File for Tax).
Romania implemented SAF-T to improve the data it receives in VAT returns, requiring more granular detail that is reported in real time. As well as benefiting the Romanian tax authority, the electronic submission of the D406 streamlines tax compliance and reporting for businesses.
The SAF-T mandate in Romania has been introduced through the amendment of the Fiscal Procedure Code, which foresees the obligation for taxpayers to submit a declaration containing information from the accounting and tax records.
The Fiscal Procedure Code also determines that the submission of the SAF-T file must be done electronically, leaving the remaining conditions to be determined by order of the ANAF.
Accordingly, ANAF has issued Order No. 1783, of 4 November 2021, which introduced the SAF-T reporting requirement from 1 January 2022. The Order provided the SAF-T Form D406, as well as the legal deadlines for submitting the various SAF-T files and the procedure and conditions for submission.
In these terms, the D406 file must be submitted electronically by generating an XML format file, which is submitted to a validation procedure, and preparing the corresponding D406 Form in PDF format.
The various SAF-T files can be submitted monthly, quarterly, annually and on-demand, depending on the VAT regime applicable to the taxpayer as well as on the type of file being submitted.
How to declare tax information with the SAF-T in Romania
Transaction and accounting data must be reported through Declaratiei Informative D406. Taxpayers are required to submit the information electronically in PDF format with an XML attachment and electronic signature.
What information must be declared to the ANAF?
The Romanian SAF-T file, the D406, is comprised of five sections:
General Ledger
Accounts Receivable
Accounts Payable
Fixed Assets
Inventory
The SAF-T D406 file to be submitted on a quarterly/monthly basis does not include information on Fixed Assets or Inventory. That data will be part of separate SAF-T files with different filling frequencies, namely the D406 Assets and the D406 Stocks.
Non-resident and small taxpayers will be required to submit a simplified SAF-T file from 2025 that will only account for the purchases and sales carried out through their Romanian VAT ID.
When to submit a SAF-T declaration in Romania
Submission deadlines for SAF-T in Romania can be monthly/quarterly, annual or on demand by the tax authorities.
Monthly or quarterly: The D406 file, except for the ‘Assets’ and ‘Stocks’ sections, shall be submitted monthly or quarterly by resident taxpayers, depending on the applicable VAT regime. The deadline for submission is the last calendar day of the month following the end of the reporting period.
Annual: The ‘Assets’ section can be submitted autonomously and must be filled annually by resident taxpayers within the deadline for submitting the annual financial statements.
On request: The ‘Stocks’ section shall be submitted only if requested by the tax authorities within the deadline established by that request, which cannot be shorter than 30 days.
Timeline of SAF-T in Romania
Romania’s implementation of SAF-T began on 1 January 2022 but only for a specific category of taxpayers. The following dates are when the SAF-T obligation applies to different types of taxpayers:
September 2021: Voluntary test period began
1 January 2022: Large taxpayers included in the tax authority’s list from 2021 must file SAF-T
1 July 2022: Large taxpayers who were not in this category on 1 January 2022 must file SAF-T
1 January 2023: Medium-sized taxpayers, financial institutions and insurance firms categorised as large taxpayers must file SAF-T
1 January 2025: Small taxpayers and non-resident taxpayers registered for VAT in Romania must file SAF-T
Understanding SAF-T D406 in Romania
The SAF-T D406 statement is required to be submitted each month or quarter to the Romanian tax authority (ANAF). The submission frequency is dependent on the company’s VAT regime, and it can either be monthly or quarterly.
There is also an annual SAF-T report under D406 – based on the taxpayer’s financial year – which includes asset information from the previous year, as well as a D406 Stock information report which is to be created based on the ANAF’s request.
The SAF-T file must be submitted electronically, through the tax authorities’ public service “Servicii online – Depunere declarații”.
Implementing SAF-T as a business
Compliance is important for businesses if they are to avoid fines and other penalties from Romania’s tax authorities. To comply with SAF-T, taxpayers must meet reporting deadlines with relevant and complete information – the use of purpose-built solutions can help with this.
Sovos SAF-T solutions can help your organization save time and effort when ensuring compliance with the mandate. Automating the process of preparing files helps not only with efficiency but also accuracy and compliance, providing peace of mind and freeing up valuable time.
For taxpayers established outside of the EU, complying with Romania’s VAT rules requires the appointment of a fiscal representative should they sell in the country. Sovos can help here too – contact us for more information.
Romania is aiming to make e-invoicing mandatory for B2B transactions of all types. Following the EU Council’s derogatory decision, allowing Romania to implement mandatory e-invoicing, Romania published a new B2B mandate with a 2024 oll-out date. The new law also introduces a new reporting system that will operate within the first six months of the introduction of the RO e-Factura e-invoicing system in July 2024. Read more in this overview about e-invoicing in Romania or take a look at this overview about VAT compliance in Romania.
SAF-T became mandatory for large resident taxpayers in Romania in January 2022, and for medium-sized resident taxpayers in January 2023. Small and non-resident taxpayers will be obligated under the SAF-T mandate in January 2025.
While SAF-T has a similar reporting format across countries, each country as its own mandatory fields. In Romania, three different declarations are submitted by taxpayers: the general D406 file, the D406 Assets and the D406 Stocks.
SAF-T in Romania currently applies to medium-sized and large resident taxpayers. Small and non-resident taxpayers will need to comply with SAF-T from 2025.
Taxpayers who fail to comply with SAF-T in Romania by not submitting the D406 report may be fined by the tax authority. There is a three-month grace period for non-submission in which no fines will be issued, but after the period a fine of 1,000-5,000 RON may be imposed. For an incorrect or incomplete submission, taxpayers may receive a fine of 500-1,500 RON.
The submission deadline for SAF-T in Romania ends on the last day of the month following the reporting period, which is either a month or a quarter for information outside of stocks and assets.The D406 Assets declaration is to be submitted within the deadline for the yearly submission of the taxpayer’s financial statements.
The D406 Stocks declaration is to be submitted on demand, within the deadline prescribed by the Tax Authorities (a minimum 30-day deadline).
Our Solution capabilities for Romania SAF-T
Data Extraction
Painlessly aggregate and consolidate data from a wide range of source systems across General Ledgers, Accounts Receivable, Accounts Payable (for monthly or quarterly submissions), Fixed Assets (for annual submissions) and Inventory (submitted on demand) complying with Romania’s standard tax control file, D406.
Check the accuracy, integrity and quality of complex data structures required by Romania SAF-T to give you peace of mind before you submit your D406 file to be audited by the ANAF.
Ensure that all required data sets from accounting entries, sales and purchase transactions, asset depreciation, stock movements and more, are mapped seamlessly into Romania’s D406 schema, ready to be analyzed and submitted punctually to the ANAF.
Spain is one of many European countries to adopt e-invoicing for taxpayers. With several standards to comply with and additional regional VAT compliance, understanding Spain’s e-invoicing requirements can be complex.
Our regulatory experts break down what you need to know, from specific B2B and B2G standards to required formats. Bookmark this page to stay up to date with the latest e-invoicing requirements in Spain.
Electronic invoicing in Spain has been mandatory for all transactions between public administrations and their suppliers since 2015.
Businesses are under varying e-invoicing obligations depending on the nature of their transactions. Electronic invoices will soon be mandated for business-to-business (B2B) transactions, whereas business-to-government (B2G) transactions may already qualify for e-invoicing. More information on the specifics of a company’s compliance obligations can be found below.
How does e-invoicing in Spain work?
From an e-invoicing perspective, Spain is a post-audit country. There is not an e-invoice clearance requirement, but Spain has been an early adopter of the CTC method in the EU with the introduction of mandatory near real-time invoice data reporting.
Currently, Spain’s tax authority is transitioning to adopt a mandatory B2B e-invoicing requirement that will significantly affect the country’s e-invoicing process.
Spain B2B E-invoicing
Spain originally planned to launch its B2B e-invoicing mandate in July 2024 but postponed it. As the Spanish government commits to giving a year’s notice before implementing a passed law, businesses can currently expect a 2025 launch for the mandate.
The country is expected to implement B2B e-invoicing in a phased approach, with it initially affecting large taxpayers and all other taxpayers joining them a year later.
Since 2015, e-invoicing has been mandatory in Spain in the public sector. Law 25/2013 mandates that all invoices sent to public sector entities must be sent electronically and signed with an eSignature. All public entities receive invoices through one common point of entry, namely FACe.
An exception to the rule allows paper invoices to be sent to public administrations if the transaction amount is under 5,000 euros.
Timeline for e-invoicing requirements in Spain
The mandatory B2B electronic invoicing requirement will be effective according to the annual turnover of the taxpayer:
Entrepreneurs and professionals whose annual turnover exceeds €8 million will have one year after the regulatory framework is approved
For the rest of the entrepreneurs and professionals, the electronic invoicing obligation will take effect two years after the regulatory framework is approved
1 July, 2030: Spanish VAT-registered businesses must comply with VAT in the Digital Age (ViDA) requirements, which include mandatory e-invoicing and digital reporting for Intra-Community B2B transactions.
This timeline will be updated when official implementation dates are announced.
What is the required format for an e-invoice in Spain?
Spain’s approved e-invoicing format for B2G transactions is FacturaE and it follows the XAdES standard and uses XML signatures. The central platform to send e-invoices to public administrations is FACe, though business transactions are to be processed through web service FACeB2B.
E-invoices in Spain must comply with EN 16931 and are required to include set information, including:
QR code
VAT number
Date and time
Invoice number
Total invoice amount including taxes
Unique identification number (Número de Identificación Fiscal or NIF)
The e-invoice issuer must archive the electronic document for a minimum of six years.
Standards and communications for e-invoicing in Spain
There are several e-invoicing standards in play in Spain, governing how the process is carried out by taxpayers.
The format of e-invoices for B2G transactions must meet set standards, for example. Namely, electronic invoices must follow the FacturaE format – an XML-based national standard that is used in tandem with a secure eSignature which follows the XAdES standard.
Once e-invoicing for B2B transactions comes into effect, the format of e-invoices must comply with the EN 16931 standard. The following will be accepted:
EDIFACT invoice messages compliant with ISO 0735
UBL Invoice and Credit note messages in accordance with ISO/IEC 19845:2015
In terms of communication for e-invoicing in Spain, FACe is the singular hub for submitting electronic invoices in B2G supplies.
What else is required for full VAT compliance in Spain?
Spain is a notoriously complex country where VAT compliance is concerned. The tax authority has numerous rules in place that businesses need to be aware of to be fully compliant. For an overview read this comprehensive page about VAT compliance in Spain.
By now, you will be fully aware that tax compliance in Spain isn’t simple for many businesses. You don’t have to do things alone, though – Sovos can help, combining local tax expertise with complete compliance solutions.
When it was announced recently that the introduction of a new French e-invoicing mandate had been delayed until September 2026 there was a collective sigh of relief amongst many in the tax and finance world. More time to adequately prepare, put systems and methodologies in place and have your business ready to be compliant from the get-go.
Sounds optimal, but let’s focus on reality. First, the reported delay is a bit deceiving. While it may not officially take effect until 2026, you only have a matter of months to get prepared to participate in the extended trial. Human nature may be to push it to the side and focus on more short-term deadlines. However, to not take advantage of the extra time provided would be shortsighted at best.
Here are five ways you can make this extra time work for you:
Take time to fully understand the mandate and how it impacts your organization. Be prepared to answer questions such as, where will e-invoicing and e-reporting data come from? Do we need to involve IT. Use this time to eliminate surprises.
Study and consider what other aspects of the business may be impacted by this mandate. Understand what other business data is required for a smooth integration and approvals. Consider confidentiality and data privacy.
Begin to align internal processes, workflows and systems in preparation for impending changes. This is your opportunity to test different approaches and workstreams to ensure a high-level of efficiency. How will you manage the process and who in your organization will have operational responsibility when extended trials go live?
The first list of officially registered service providers will go live in spring, 2024. Use this time to do your research on which service providers make sense for your organization, both during the trial period and as a potential long-term partner.
Evaluate your current compliance management strategy. As you begin working with a registered service provider through the trial period, consider how this differs from your approach to other government mandates. What can you learn from this experience and what other areas might you be able to improve upon?
Businesses will soon be able to register proactively for the pilot program, which has been designed to allow businesses to test the PDP platform. This program is intended to build knowledge and confidence and ensure businesses are on the path to readiness.
Therefore, it would be prudent to regard the delay as a mere six-month postponement, with the beginning of the pilot program acting as the de facto starting date. To understand the full impact on their business processes and data flows, companies will need to thoroughly test up to 36 use-cases.
The good news is that the many software vendors helping companies to streamline their purchase-to-pay and order-to-cash processes will be eager to test the compliance of their solutions as early as possible in what has become a completely new ecosystem.
We are proud to say that Sovos is one of the first 20 candidates for service provider (PDP) accreditation in France and as such, will be fully prepared to assist your organization through the trial process and beyond.
Take action:
Looking for more information about how to comply with the French Mandate?
E-documents or electronic documents are rapidly growing in usage across businesses of all shapes and sizes, in countries around the world.
While the automated exchange of e-documents is a relatively new phenomenon which is being adopted on a country-by-country basis, there is basic universal information that your business would benefit from understanding – and potentially utilizing.
This blog will serve as your one-stop shop for required e-document knowledge.
What is an e-document?
An e-document is an electronic transactional document or message and is typically used in an automated business process.
As the digitisation of business accelerates, so too does the use of electronic documents – whether that be an electronic invoice sent in real-time to a national tax authority or an electronic goods receipt note exchanged between companies.
The difference between electronic documents and other digital documents such as PDFs is that e-documents are machine-readable and are generally exchanged by online platforms or software.
That said, there are numerous types of e-documents and there is little standardisation as each country has its own stance and potential mandate on their adoption. The European Union has long been working on its approach to e-documents for increased interoperability with definitions and rules as part of its efforts under the eGovernment Action plan and eIDAS regulation to facilitate digital transactions and services in the EU.
In addition, the UK recently adopted the UK’s Electronic Document Trade Act which is a huge step towards the digitization of trade documents and potentially paperless global trade.
Types of e-documents
There is a wide variety of electronic documents to suit a number of applications across business, helping to streamline workflows and operations, facilitate cross-border trade and save on costs.
Other electronic documents that are used in some countries include:
E-purchase orders
E-credit & e-debit notes
E-goods receipt notes
E-payment instructions
There has been a notable implementation of e-documents in transport in recent years, with the likes of Romania adopting a system that requires taxpayers to use an electronic waybill system to obtain clearance of the transport document before the transport of goods begins. Read our dedicated blog to find out more about the global rise of e-transport documents.
One particular e-document that has had an exponential rise in utility over the past few years is the e-invoice. Electronic invoices have grown in popularity as countries develop their continuous transaction controls (CTC) and e-invoicing regulatory obligations. The likes of France, Spain and Poland all plan to introduce e-invoice mandates, requiring taxpayers to send invoices electronically.
There is a host of reasons that electronic documents can be beneficial, which explains why tax administrations globally are implementing e-document mandates.
A primary reason for the use of e-documents is that they generally allow for the automation of workflows, increasing safety, accuracy, transparency and cost-saving for the involved parties. Automating the process of generating and exchanging documentation reduces the risk of error, allows for seamless transmission of information (including to tax authorities who seek greater transparency) and reduces the reliance on paper (providing an environmental benefit).
Another reason businesses use electronic documents is simply because they are mandated to do so as part of tax digitization controls. An increasing amount of tax authorities are making it an obligation to send documents electronically, and facing a penalty due to non-compliance is not desirable. As CTC regime adoption grows, so too does the need for businesses to meet their new e-document obligations.
Compliance conditions of e-documents
The compliance conditions of e-documents vary depending on the national rules, but there are some typical conditions across regimes.
In the context of tax digitization controls, the conditions that apply to some of the most regulated e-document types, such as the e-invoice, include:
Following a specific document format (as dictated by the relevant authority)
Ensuring authenticity and integrity (through the use of e-signatures or other validation methods)
Using the tax authority’s designated online platform or software for transmission
Archival of e-documents for a specified period of time and by implementing certain security measures
The recipient must consent to receiving electronic invoices (unless e-invoicing is mandated)
Producing and storing system documentation describing the e-invoicing/archiving system and process
What’s the difference between a digital document and an electronic document?
The difference between electronic documents and digital documents is a hot topic. It’s easy to get confused between the two considering that “digital” and “electronic” are used interchangeably by many, but it’s important to understand the difference.
Digital documents are often a digital analogue of a physical document – think a scanned document, photograph, or PDF – and oftentimes are simple for people to read and digest. An example of a digital document would be an invoice sent as a PDF via email.
Electronic documents are files of data that are generated by and for computers, making them hard for people to read due to their formatting. Such data – like that seen in a structured e-invoice (e.g. XML) – is meant to be sent from one system to another without interference from humans.
How Sovos can help
Sovos’ software allows businesses to manage CTC obligations, including e-invoicing compliance and archiving.
As the world continues its digitisation, it’s important to stay on top of evolving regulations and to keep up with best practices for your business. Working with Sovos, your business can:
Automate processes
Reduce the cost of compliance
Minimise the need for ad hoc IT involvement
Stop worrying about ever-changing formats, processes and obligations
Increase efficiency by saving time, eliminating manual updates and enhancing accuracy
With the rate of change in tax digitization not set to slow down any time soon, it’s more important than ever to keep up with what’s happening where you do business.
This quarter, our VAT Snapshot webinar looks in detail at CTC and e-invoicing implementation timelines across six different countries.
Join Dilara İnal and Carolina Silva from our Regulatory Analysis and Design team for an examination of scope, key timelines and essential milestones for compliance across these jurisdictions.
The webinar will cover:
Germany – Introduction of a new CTC mandate for mandatory e-invoicing
Malaysia – Key features and the phased implementation of the upcoming CTC mandate
Israel – Scope of the new clearance regime, and details on the ‘pilot programme’ rollout
Croatia – Scope of the new e-invoicing and CTC reporting system
France – Recent changes to the timeline and a closer look at some of the key features that make up the French mandate
Poland – Core details for the forthcoming July 2024 e-invoicing mandate
As always, please bring your questions for our experts in the Q&A at the end.
Stay up to date with the evolving landscape of tax mandates by registering today.
The Chilean Internal Revenue Service (SII) recently published version 4.00 of the document describing the format of electronic tickets for Sales and Services.
The electronic ticket (or Boleta Electrónica) is an electronic receipt issued for the sale of goods or services to individuals, consumers or end users.
The document includes basic information about the transaction, such as:
The seller’s tax identification number
A summarised description of the goods or services
The total amount paid
Applicable taxes
The electronic ticket is for less formal, business-to-consumer (B2C) transactions and is subject to less rigorous reporting requirements than electronic invoices (Factura Electrónica). It is often used for smaller transactions, such as retail purchases or services rendered to individuals.
Who is required to issue electronic tickets?
All taxpayers who issue sales and service receipts on paper
All taxpayers who start as a company must issue sales and service receipts to final consumers
Businesses must use certified invoicing software to generate electronic tickets. These software solutions need to be approved by the Chilean tax authority, the Servicio de Impuestos Internos (SII).
The generated electronic invoices must be digitally signed using an electronic signature to ensure their authenticity and integrity.
Taxpayers authorised as issuers of electronic tickets must digitally send all the electronic tickets issued and generated to the SII. These should follow the Technical Instructions provided in Annex 1 of Resolution 74 of 2020, and any future updates.
What’s required in an electronic ticket?
In accordance with the Technical Instructions, the electronic ticket must contain the following information:
The net amount of the transaction
VAT corresponding to the transaction
Business name of the company that made the sale
Single Taxpayer Registry (RUT) of the company
Single Taxpayer Registry (RUT) of the buyer
Date of issue
Merchandise breakdown: product sold, quantity, unit price and total sale
After generating the electronic tickets, businesses submit them to the SII. Since the SII must validate both the XML format of the document and its electronic signature, the SII has established a limit of 500 ballots per batch.
How electronic tickets can help businesses
On the other side of the transaction, the recipient of an electronic ticket can access and verify the invoice through the SII’s online platform. They can accept or reject the invoice, which helps maintain transparency and accurate transactions.
The data generated by this electronic receipt system drives efficiency. For example, businesses can obtain important information, such as:
The number of sales during a given time
The company’s sales flow
The number of tickets or transactions in different branches of the same business
Other data to help business decision-making
Businesses must maintain records for six years in the XML format established in version 4.00.
Non-compliance with the electronic invoicing requirements or submitting inaccurate information can lead to penalties. The SII has the authority to audit businesses to ensure compliance with tax regulations.
Need help for invoicing in Chile?
Are you in financial services or working at a bank with more questions about invoicing in Chile? Speak to our tax experts.
Extension of the implementation dates of the B2B e-invoicing Mandate.
Update: 9 December 2024
On September 15th, 2024, the French Tax Authorities published a Press Release announcing a profound change in the upcoming French Mandate for electronic e-invoicing & e-reporting.
Indeed, the Public Portal (aka PPF) will no longer provide e-Invoicing Services, making it compulsory for every FR-established and VAT-Registered Taxpayer to send and receive e-Invoices via a 3rd Party Dematerialization Platform (aka PDP) of its choice.
After this initial announcement, the FR TA has communicated additional details, whether on the rationale behind that pivotal decision or on the next milestones until the Mandate enters into force:
The FR TA very much insisted on that the start dates are confirmed – September 1st, 2026 and September 1st, 2027 are the dates on which companies will need to comply – at the latest.
The decision to remove the e-Invoicing Services from the PPF, was made after the DGFiP realized that the PDPs offerings will be broad enough (in terms of functionalities and positioning) to cover the needs of all the Taxpayers – whatever their profile.
With the PPF focused on Data Gathering (CTC & e-Reporting Services) and Central Directory Management, its development is easier, and its delivery is secured.
Main next Milestones are:
Mid-November 24’: Release of a note focusing on the Directory Pilot (for PDPs only).
Mid-December: Release of the next version of the External Specifications (Data Gathering & Directory Services).
March 2025: Directory Pilot for all PDPs to test interoperability with the PPF (Directory Services).
Q4 2025: Data Gathering Services are delivered in a UAT Env. so that PDPs can complete end-2-end tests at the end of which – if successful – their Official Registration will be confirmed.
Jan 2026: Ahead of the September 2026 ‘Go-Live’, a Global Pilot Phase will be organized (precise modalities not available yet) so that Taxpayers can test the whole processes with their PDPs.
Update: 2 January 2024
TheFinance Law for 2024has been officially adopted and published in the Official Gazette on 30 December 2023. With the finalization of the law, the new implementation dates are as follows:
Receipt of e-invoices: Starting from 1 September 2026, ALL taxpayers, regardless of their size, will be required to be capable of receiving e-invoices. This date may be extended to December 1, 2026, at the latest, but only by decree.
Issuing e-invoices:
For Large Corp. & Mid Caps.: Obligation to issue electronic invoices on September 1, 2026. This date may be extended to December 1, 2026, at the latest, but only by decree.
For SMEs (other than Large Corp. & Mid Caps): Obligation to issue electronic invoices on September 1, 2027. This date may be extended to December 1, 2027, at the latest, but only by decree.
International B2B, B2C transaction and payment data transmission:
The e-reporting obligation for international B2B (sales and purchases) and B2C transactions and Payment data follows the same timetable as that for issuing electronic invoices (September 1, 2026 or September 1, 2027 depending on the size of the company).
The implementing decree that will formally ratify this new schedule is expected during the first quarter of 2024.
Looking for more information about how to comply with the French Mandate? Contact our expert team.
Update: 19 October 2023
The long-awaited new implementation timeline regarding the e-invoicing and e-reporting within the draft Finance Law for 2024 has been unveiled on 17 October 2023.
According to the draft amending General Tax Code and Law No. 2022-1157, the new dates are as follows:
Implementation phases: The roll out of the mandate will now occur in two phases, as opposed to the previously planned three phases.
Issuing e-invoices:
The first phase, targeting large and medium-sized companies, is scheduled for 1 September 2026.
The second phase, which covers small and micro-enterprises, is scheduled for 1 September 2027.
Receipt of e-invoices: Starting from 1 September 2026, all taxpayers will be required to be capable of receiving e-invoices.
E-reporting obligations: The enforcement of e-reporting obligations will follow the same revised dates.
It is important to note that the above-mentioned dates, September 2026 and September 2027, may be subject to readjustment with the possibility of rescheduling to the 1st of December as the latest date, in the respective years.
After the adoption of Finance Law for 2024, a Decree complementing the law is expected to be issued in the first quarter of the upcoming year for full enforcement of aforementioned obligations.
Companies need to take advantage of the additional time through active participation in the pilot phase during which all relevant use cases should be tested so that changes to applications, processes and systems can be taken care of and fine-tuned in good time to ensure compliance.
Looking for more information about how to comply with the French Mandate? Contact our expert team.
Update: 15 September 2023
In a recent meeting of the Communauté des Relais, the tax authority released additional details surrounding the previously communicated postponement of the B2B e-invoicing mandate in France.
This delay is a result of the tax authority listening to feedback from French businesses who have struggled to meet the original timeline. It’s further evidence, as previously iterated by the ICC of just how much time and effort is required for most businesses to compare for the complexities of a new mandate.
While the formal dates are still to be defined, the revised main timeline was presented as part of a roll-out in 3 stages:
2024: The authorities will publish the first list of officially registered service providers (PDPs – Plateformes de Dématérialisation Partenaires) by the spring of 2024. During the course of 2024, the development of the public portal (PPF – Portail Public de Facturation) will be completed.
2025: During this year, a large-scale pilot project, involving companies of all sizes will be conducted. The tax authority views this pilot as an opportunity for taxpayers to fine-tune their e-invoicing and e-reporting processes and systems to comply with what has grown to be, a complex and sophisticated CTC framework.
2026: The roll-out of the obligation for the entire economy will largely take place during 2026. However, at what pace remains to be seen once the Finance Law is adopted by Parliament at the end of 2023.
Businesses impacted by the French mandate, headquartered in France and elsewhere, will now be in a better position to successfully comply with the new reform, assuming they make use of the added time provided by the French authorities. In particular, by proactively using the pilot program to build confidence and knowledge on the critical path to readiness. For the largest taxpayers facing these obligations, it would be prudent to regard these changes as a mere 6-month postponement, with the beginning of the pilot program acting as the de facto starting date. To understand the full impact on their business processes and data flows, companies will need to thoroughly test up to 36 use-cases. The many software vendors helping companies to streamline their purchase-to-pay and order-to-cash processes will certainly be eager to test the compliance of their solutions as early as possible in what has become a completely new ecosystem.
Participation in the extended pilot, with professional support from Sovos, provides a risk-free environment to assess and then conduct the essential finetuning.
Sovos is one of the first 20 candidates for service provider (PDP) accreditation in France, and as such will be ready to sustain our customers as they take the numerous steps needed to fully comply with the new CTC framework, drawing on its rich experience of keeping customers compliant with complicated e-invoicing obligations around the world.
Looking for more information about how to comply with the French Mandate? Contact our expert team.
10 August 2023
The French Directorate General of Public Finances (DGFiP) officially postponed the implementation of the country’s electronic invoicing mandate on 28 July. The postponement is in order to provide necessary time for taxpayers to comply with the mandate.
The latest official word states that the revised timeline for the mandate will be provided within the framework of the Finance Law for 2024. We expect this law to be adopted in late 2023.
In addition, on 31 July the DGFiP published updated ‘External specifications file for electronic invoicing’(version 2.3). Despite deferral of the initial go-live, these updates demonstrate the authorities’ commitment to developing the mandate and set the expectation that preparations by taxpayers, vendors, PDP candidates and professional organizations must continue.
The French Mandate is one of the most complex tax digitization initiatives seen in EMEA to date. It’s essential that companies continue their preparations. Compliance with this mandate requires readying applications, processes and systems to a complex set of requirements. According to the ICC, businesses need at least 12-18 months to prepare for the shift to e-invoicing and e-reporting.
Please note that this information is subject to any further updates or changes from the French authorities and no further details are available at present. We will communicate any additional information once it is made available.
Sovos is experienced in helping our customers navigate digitization regulations around the world, including the French Mandate.
Looking for more information about how to comply with the French Mandate? Contact our expert team.
E-invoicing: Your Guide
E-invoicing isn’t new. It has existed for over three decades. Globally, e-invoicing adoption is growing with new mandates appearing each year and many tax authorities continuing to announce intentions to introduce measures.
This guide is all you need to understand e-invoicing for good.
It will help you to:
Make informed decisions for your business
Cut through the buzzwords and jargon
Continue to grow your business with clarity and confidence
Every country has its own approach to e-invoicing, making the current rules and state of play hard to follow. Add in the software requirements needed to comply with each mandate and things can quickly get complicated.
This e-invoicing guide is a vital part of your tax compliance toolkit.
From e-invoicing basics to understanding the latest developments with the EU’s VAT in the Digital Age proposal, this guide collates and explains essential information on electronic invoicing.
There are lots of resources out there, but this is your essential one-stop shop for all your e-invoicing questions.
E-invoicing, or electronic invoicing, is the exchange of a digital invoice document between a buyer and a supplier. The digitization of paper invoicing and the associated billing processes between suppliers and buyers electronically provides time and resource savings by automating business processes in finance and accounting.
While today many digital invoices are in PDF format, there is a trend towards invoices being in a machine-readable format so that businesses can automate processes and controls for issuance and approval.
A business landscape that fully embraces tax digitization reaps the following benefits:
Increased accuracy, efficiency and transparency by removing manual intervention
Improved record-keeping through third-party audit chains
Improved environmental footprint
Reduction in human errors and risks in business
Increased potential to be compliant with regulatory requirements
Key facts about e-invoicing
E-invoicing in the European Union
In the EU, many countries accepted e-invoicing for VAT purposes before it was formally regulated. All Member States were formally obligated to accept this practice due to changes to the VAT Directive in 2001. Subsequent changes to the VAT Directive in 2010 aimed to create equal treatment between paper and electronic invoices, particularly in relation to integrity and authenticity requirements.
Outside the domain of VAT, Directive 2014/55/EU made the adoption of e-invoicing in public procurement mandatory for public authorities in the Member States and outlined a European e-invoicing standard.
Several Member States took the opportunity to also introduce mandatory e-invoicing on the supplier side of the public procurement transaction. However, as EU Directives must be transposed into national legislation to be legally enforced, there still isn’t full harmonisation of e-invoicing in the EU.
The scope of these Directives leaves out important aspects such as reporting invoice data to the tax authority, leaving it up to each Member State to regulate as they see fit. Accordingly, it’s still important to check e-invoicing requirements for each country to ensure compliance.
The upcoming VAT in the Digital Age (ViDA) proposal aims to achieve a more harmonised approach to e-reporting and e-invoicing in the EU. With the aim of making e-invoicing the default system for the issuance of invoices, the ViDA proposal aims to introduce electronic invoicing and reporting requirements for intra-Community B2B transactions, using the EU Standard for Electronic Invoicing (EN16931).
Under ViDA, if a Member State introduces digital reporting requirements for domestic transactions, e-invoicing will be mandatory for the transactions in scope. This change will affect European businesses as well as non-EU companies trading in the EU.
What is an e-invoice?
An e-invoice is an electronic document that has been issued, exchanged and stored electronically. Under current regulation in the EU, this might be done in a structured format (such as an XML) or non-structured (such as a PDF). When paper invoices exchanged between trading partners are subsequently scanned and digitized by the buyer, these are not considered e-invoices even if the buyer only stores the digital file.
Country-specific regulations dictate the issuance format and manner of exchange of an e-invoice. More countries are moving towards systems that impose more frequent and granular controls, known as continuous transaction controls (CTCs).
In the European Union, the e-invoicing standard (EN 16931) established by Directive 2014/55, harmonises the meaning of fields used in electronic invoice documents for public procurement. This so-called semantic standard is translated into a number of technical invoice formats, also referred to as syntactic standards.
The European Commission’s VAT in the Digital Age proposals published in December 2022 aims to bring in several changes to e-invoicing requirements across Europe. One example of such changes is the amendment of the definition of e-invoicing, requiring e-invoices to always be in a structured format, aligning with Directive 2014/55 on electronic invoicing in public procurement.
Another change ViDA proposes, if approved, is that the VAT Directive will only consider structured electronic files as e-invoices, whereas non-structured formats like PDF will no longer represent electronic invoices from a VAT perspective.
What are continuous transaction controls?
Continuous transaction controls is an approach to tax enforcement based on the electronic submission of transactional data, normally in the form of an e-invoice (or a subset thereof). A taxpayer’s system submits the data to a tax administration’s designated platform before, during or just after the actual exchange of data from the transaction.
CTCs are typically used by tax authorities to improve VAT controls and can lower the administrative burden of compliance. Examples include the use of data to prefill VAT returns or replace existing declarations, automated and faster VAT refunds, reduction of errors due to validation controls, and other composite fiscal benefits.
However, the continuous data transmission requirements can be challenging for organisations. The initial system and process adjustments can be cumbersome. Mandate requirements evolve and expand frequently and, as no two countries have the same approach to CTCs, a company trading in multiple countries has to pay close attention to each jurisdiction’s specific rules and changes.
Where is e-invoicing mandatory?
In Europe, many tax authorities started their mandatory e-invoicing programs with business-to-government (B2G), gradually expanding requirements to business-to-business (B2B) and business-to-consumer (B2C).
Roll-out usually starts with large companies with a specific annual turnover, before staggering requirements to additional groups and eventually becoming mandatory for all businesses.
Mandatory B2G e-invoicing in EU
In public procurement, it is mandatory for the public sector to receive e-invoices that follow one of the technical formats under the EU Standard for Electronic Invoicing (EN16931). More countries are expanding the obligation to suppliers, who must issue electronic invoices in their operations with public entities.
In most European Union countries, B2B trading parties are free to exchange e-invoices in any form and format agreed upon. B2B e-invoicing is mandatory in Italy, while countries like Poland and France have published a timeline for the roll-out of a B2B e-invoicing mandate. More countries are seeking a derogation from certain provisions of the VAT Directive with the EU Commission to implement mandatory e-invoicing.
This allows the countries to introduce continuous transaction controls requirements in some form, alongside mandatory e-invoicing. In Italy, for example, taxpayers must issue invoices electronically in a structured format and submit them to the tax authority for clearance before sending to the recipient. As of 2023, countries following in the footsteps of Italy by announcing the introduction of mandatory B2B e-invoicing in the upcoming years are Belgium, Germany, Romania, Poland, France and Spain.
The ViDA proposal aims to make e-invoicing the default method for invoice issuance. The European Commission wants to remove the need for derogation to introduce mandatory B2B e-invoicing in a Member State, as well as the need for buyer acceptance of supplier e-invoicing.
Mandatory B2B e-invoicing in the EU
Mandatory E-invoicing: Italy (IT)
Voluntary E-invoicing: Hungary (HU)
Received EU Derogation: France (FR), Germany (DE), Poland (PL), and Romania (RO)
Announced Plans for Mandatory E-invoicing: Belgium (BE), Croatia (HR), Slovakia (SK), Slovenia (SI), and Spain (ES)
How can I benefit from an e-invoicing solution?
There are a host of potential benefits to using e-invoicing software solutions. The real advantages go beyond eliminating printing, envelope stuffing and the dependency on physical mail delivery.
First of all, electronic invoicing allows you to send invoices to a buyer quickly and securely directly from your source information system.
Exchanging invoices in a standardised structure format, allowing for automated end-to-end processing, provides the biggest process benefits and financial savings. Handling processes related to invoice sending, approvals and payment is more effective without manual intervention – which can be error-prone, slower and costlier.
E-invoicing also allows businesses to validate data, ensuring compliance with tax authority requirements. Automation ensures consistency between invoice exchange and reporting processes and accounting records. Automating tax determination and reporting codes can provide significant compliance benefits at a much lower cost than paper-based invoicing.
What are other types of e-documents?
As well as e-invoicing, there are other electronic documents used by tax and other authorities as part of tax digitization initiatives. The following is a non-exhaustive list:
E-receipt is the consumer receipt equivalent of an electronic invoice.
E-transport document is an electronic document identifying goods transported, as well as the taxable person and/or carrier responsible for the transport. This allows tax administration controls in relation to the transport.
Electronic credit and debit notes are correctional documents often used to adjust errors in previously issued e-invoices.
E-payroll document is a digital document with the same properties as a traditional payroll but the tax authority must clear it, just like an e-invoice.
E-accounting documents comprise business accounting ledgers submitted at a specific moment in time via a network to the tax administration, as a batch/file or data.
For more information read this blog about e-documents.
What is e-archiving?
Primarily, e-archiving removes paper documents and physical storage from the tax process by storing and preserving digital records. Tax authorities set their own requirements for the conditions and the number of years companies must archive documents. In the EU, this area of law is not harmonised.
Although e-invoicing rules vary, nearly all require archiving the ‘original’ invoice in the form and format the trading partners exchanged it in.
The pressure for e-invoicing compliance is increasing globally. Tax administrations around the world are spending billions on invoice control systems, and it’s the responsibility of businesses to meet requirements and build an audit-proof archive. Sovos delivers an e-archiving solution that keeps companies compliant across over 60 countries.
What is PEPPOL?
PEPPOL (Pan-European Public Procurement On-Line) is an e-delivery network that operates with a set of technical specifications called PEPPOL BIS (Business Interoperability Specifications). OpenPEPPOL is an association that has assumed full responsibility for developing and maintaining the PEPPOL network and specifications.
PEPPOL’s primary purpose is to facilitate the exchange of business documents, allowing businesses to communicate electronically with any European government institution involved in the procurement process. PEPPOL has several domains that cover pre-award procurement communications and post-award processes such as invoicing.
Initially designed for public procurement in the EU, PEPPOL’s open and interoperable network has gained popularity in the private sector. Gradually, many governments have also extended the use of this e-procurement network by making PEPPOL mandatory for the transmission of B2B e-invoices. As a result, its usage is on the rise in a growing number of countries, both within and outside the EU.
What is the future of e-invoicing?
The European Commission announced a reform of the invoicing and reporting framework named VAT in the Digital Age in December 2022. As of now, there are still processes to go through before the Commission makes any legislative updates.
The proposal amends the VAT Directive and regulations related to three distinct areas, one of which is digital reporting obligations and e-invoicing. Among other measures, the proposal includes:
Introducing mandatory Digital Reporting Requirements (DRR) for intra-EU cross-border B2B transactions.
Using the EU Standard for Electronic Invoicing (EN16931) as the reporting format.
Pairing the Digital Reporting Requirements with mandatory e-invoicing for intra-EU transactions between businesses.
Only electronic invoices issued in a structured format will be considered e-invoices, and the EN16931 will be the generally accepted standard.
Obtaining buyers’ approval to receive e-invoices will no longer be required by suppliers.
Very few countries in the world do not allow e-invoice issuance or have significant limitations that make adopting e-invoicing difficult. For instance, in Morocco e-invoicing without prior consultation with the tax authority is not recommended. In Venezuela, e-invoicing is only allowed for certain industries and also requires the tax authority’s approval.
E-invoicing mandates are in place in many countries including Italy, Saudi Arabia, South Korea, Brazil, Chile, Colombia, Mexico, Ecuador, Costa Rica, and Peru. In Europe, upcoming e-invoicing mandates include France, Poland, Serbia, Spain, Belgium and Germany.
E-invoicing requirements vary depending on where your business is based and where you operate. Even the individual Member States of the EU have their own rules and nuances. Examples of rules around e-invoicing include ensuring that the invoice includes certain mandatory invoice content, obtaining buyer’s acceptance of exchanging e-invoices, storing the invoice in compliance with security requirements and other local requirements, etc.
The digitization of tax has far-reaching implications for companies’ applications, processes and systems. Sovos works alongside companies who want to ensure these aspects of their business are optimised and ready to embrace the compliance challenges of the future, using the most appropriate integration methodology (API, SAP connectors or IaaS) for their business.
Our global solution for e-invoicing ensures compliance across over 60 countries. Sovos eInvoice simplifies global e-invoicing compliance to keep you updated with today’s constantly changing regulatory environment.
Businesses create e-invoices using billing software. Each solution has its own specific format and flow, though sending and receiving systems use standardised formats.
E-invoicing clearance refers to systems in which a relevant tax authority must approve and clear an e-invoice before it can be sent to the recipient. The cleared electronic invoice becomes the only acceptable fiscal document and any other version of it has no validity. CTC e-invoicing clearance is a form of continuous transaction controls.
Changes to Malaysia’s CTC E-invoice Reporting Mandate Announced
On 9 February 2024, the Inland Revenue Board of Malaysia (IRBM) published long-awaited updates on the upcoming continuous transaction controls (CTC) reform. More specifically, the IRBM has released its Software Development Kit (SDK), along with new versions of the e-invoicing and e-invoicing specific guidelines containing significant changes to the CTC mandate beginning in August 2024.
Updates to CTC e-invoice reporting mandate
The new versions of the e-invoicing documentation define the scope of sectors and transactions subject to mandatory e-invoicing and clearance through the IRBM platform, MyInvois.
Sectors in scope are:
Automotive
Aviation
Luxury goods and jewellery
Construction
Licensed betting and gaming
Payments to agents, dealers and distributors
Transactions with individual buyers (B2C) fall outside of the e-invoicing mandate scope. Any e-invoices for transactions not in scope are subject to the buyer’s request.
Consolidated e-invoice requirement
In cases where the buyer does not request an e-invoice, suppliers can continue to issue an invoice or receipt as they do today. Initially, this exception was only foreseen for B2C transactions, but has now been extended to all transactions besides the ones included in the mandatory e-invoice scope.
However, suppliers will be subject to an invoice data reporting obligation and will be required to issue a monthly consolidated e-invoice (within 7 days of the month end) aggregating all invoices and receipts issued during the period.
Foreign parties are not mandated to implement Malaysia’s CTC system but Malaysian buyers must issue a self-billed e-invoice to document the expense. This should be in the same structured XML or JSON format and submitted to the MyInvois platform, similar to a reporting obligation for cross-border transactions.
Rejections and cancellations
The Malaysian CTC system will allow buyers to reject incoming invoices in their e-invoicing flows, as well as allowing suppliers to issue cancellations. These requests are subject to a 72 hour time limit, after that the invoice is considered issued and any correction or amendment will need to be through credit, debit or refund notes.
According to the IRBM, these functionalities were added solely for the convenience of the parties. Corrections can still be done through credit, debit or refund invoices if the supplier prefers.
Additionally, the new documentation has also clarified and explained how self-billing should be handled under the CTC e-invoice reporting mandate scope, as well as specific transactions such as reimbursements, employment benefits, profit distributions, foreign income and e-commerce transactions.
Timeline Changes Proposed for E-Invoicing in Malaysia
The Malaysian 2024 Budget law, which is currently pending parliamentary approval, introduces changes to the implementation timeline of mandatory e-invoicing in the country.
According to the new budget law, implementation of electronic invoicing will be delayed and start for taxpayers with an annual turnover of revenue of more than RM100 million (appx. 20 million euros) on 1 August 2024 – instead of the original planned date of June 2024.
August 2024: Taxpayers with an annual turnover or revenue of more than RM100 million
January 2025: Taxpayers with an annual turnover or revenue between RM25 million and RM100 million
July 2025: All taxpayers
This proposal offers more time for taxpayers to prepare for the new e-invoicing mandate, although these postponements are not significant. Taxpayers in the first implementation group should start preparing imminently for the new e-invoicing system in order to comply by August 2024.
Currently, the IRBM is set to release a software development kit including the relevant technical documentation by the end of 2023.
In October 2022, the Malaysian Ministry of Finance announced in its state budget plans to launch a pilot e-invoicing program in 2023 – starting with selected taxpayers.
The budget statement views e-invoices as the main strategy to improve the country’s tax revenue and digital services infrastructure. The Inland Revenue Board of Malaysia (IRBM) and the Malaysian Digital Economy Corporation (MDEC) have been working on the e-invoicing project to meet this goal. They have organised engagement sessions with stakeholders to share details regarding the project.
Following the engagement sessions, the IRBM has published a guideline regarding the implementation details of the upcoming e-invoicing system. The Malaysian e-invoicing system will be a CTC clearance model scheduled to begin in June 2024, with approximately 4,000 companies exceeding the determined threshold.
The new e-invoicing system, called MyInvois, will require all taxpayers engaged in commercial activities to issue invoices electronically in Malaysia. This applies to all individuals and organisations including, but not limited to, associations, corporations and limited liability partnerships.
The transactional scope of the requirements covers all B2B, B2G and B2C transactions – both domestic and cross-border.
The following will be subject to e-invoicing:
Invoices
Credit notes
Debit notes
Refund invoices
A separate guideline will provide further details on the treatment of cross-border transactions.
B2B and B2G e-invoicing will follow a similar workflow, as described below.
For B2C transactions where end consumers do not request e-invoices, suppliers will be allowed to issue receipts or invoices as per the current practices. However, taxpayers must aggregate the receipts or invoices issued to consumers and report them through the e-invoicing system within a set timeframe.
How will businesses issue e-invoices?
To generate e-invoices, taxpayers must use the MyInvois platform through the free solution provided by IRBM or via APIs. The authentication with the platform is based on digital certificates issued by IRBM.
Taxpayers must create and submit their e-invoices in either XML or JSON format to the MyInvois platform. After successful submission, the platform performs schema checks and assigns a unique ID to each e-invoice.
It’s important to understand that the exchange of e-invoices will not be handled by the MyInvois platform. Instead, suppliers will be responsible for including the validation link provided by IRBM, in the form of a QR Code, on the e-invoice and sending it to buyers. Buyers will utilise this QR Code to validate the existence and status of the e-invoice via the MyInvois platform.
Key requirements for Malaysia’s e-invoicing system
The guideline defines an e-invoice as a file created in the format specified by IRBM (XML and JSON) that the relevant accounting systems can automatically process. This means PDFs, JPGs or other electronic formats will no longer be considered an e-invoice.
A key component of the new e-invoicing system is the validation of the customers’ Tax Identification Number (TIN), which the issuer should validate before issuing the invoice.
Taxpayers will be able to request and retrieve essential invoice data from the MyInvois platform in certain formats through API integration.
IRBM will store all e-invoices. However, this doesn’t exempt taxpayers from maintaining their records during the storage period.
Certain non-business transactions between individual taxpayers will also be subject to e-invoicing requirements.
Currently, no registration or certification is required for service providers but this may change in the future.
Cancellation and rejection of e-invoices will be performed through the MyInvois system within 72 hours following the clearance process.
While the guideline does not explicitly mention PEPPOL, efforts are being made to establish a PEPPOL Authority in the country.
Implementation Timeline
The roll-out of the mandate will follow this schedule:
From June 2024: Mandatory implementation for taxpayers with an annual turnover or revenue of more than RM100 million (appx. 20 million Euros)
From January 2025: Mandatory implementation for taxpayers with an annual turnover or revenue of more than RM50 million
From January 2026: Mandatory implementation for taxpayers with an annual turnover or revenue of more than RM25 million
From January 2027: Mandatory implementation for all businesses
The annual turnover or revenue will be based on audited financial statements or tax returns from 2022. Once a taxpayer’s implementation timeline has been set using the 2022 financial statements, any subsequent changes to their annual turnover or revenue will not impact their go-live date.
What’s next?
With more detailed information now available about the implementation of e-invoicing in Malaysia, taxpayers must begin preparing their systems for the upcoming changes.
In Q4 2023, the IRBM is set to release a Software Development Kit including the relevant technical documentation and APIs. Furthermore, additional guidance on certain aspects of the implementation and anticipated legislative changes are expected in due course.
The Portuguese government has been working on introducing mandatory B2G (Business-to-Government) electronic invoicing in recent years, alongside other obligations for the digitization of VAT compliance in the country.
This aligns with the European Union’s efforts towards harmonising the adoption of e-invoicing in public procurement. To achieve this goal, the EU has implemented Directive 2014/55/EU to outline the responsibilities and criteria for e-invoicing in public procurement processes. The EU requires Member States to enforce an obligation for the Public Administration to receive invoices electronically.
However, several Member States, such as Portugal, have taken a step forward by making the issuance of electronic invoices mandatory for suppliers of the Public Administration. The Portuguese mandate, known as “Electronic Invoicing to the Public Administration” (Fatura Eletrónica à Administração Pública – FEAP), was introduced to streamline invoicing processes and improve efficiency in transactions between businesses and the public sector.
What is B2G e-invoicing in Portugal?
In Portugal, Law Decree 111-B/2017 and subsequent amendments established the beginning of the obligation to issue, receive and process electronic invoices in public procurement. ESPAP (Entidade de Serviços Partilhados da Administração Pública) is the Portuguese entity responsible for the implementation and management of B2G e-invoicing.
This obligation is also present in the Public Contracts Code and requires suppliers of the Public Administration to issue all invoices to public sector entities in electronic format. This excluded contracts declared secret or accompanied by special security measures and contracts concluded following the simplified direct award process (contracts below EUR 5,000).
The implementation of this regime was gradual, starting with the mandatory receipt of electronic invoices by the Public Administration in April 2019. This was followed by a phased introduction of compulsory issuance of e-invoices for suppliers of the Public Administration, starting with large companies in January 2021. The implementation calendar has been postponed several times for small, medium and microenterprises. Currently, only large companies are required to issue invoices electronically.
What is a B2G e-invoice?
An e-invoice, according to the EU Directive on e-invoicing in public procurement, is an invoice issued, transmitted and received in a structured electronic format.
Electronic invoicing requires data creation in a structured format and its transmission from the seller’s system to the buyer’s system in an automated manner. As a result, the invoice can be automatically imported into the public entity’s system.
As per Portuguese regulations, the e-invoicing model to be adopted is the semantic data model proposed for the Portuguese standard known as CIUS-PT. There is no obligation to send a PDF document attached to the electronic invoice. An invoice in PDF format is not considered an electronic invoice as they do not comply with European standards.
Suppliers must also archive electronic invoices and ensure they are accessible for the period required by the tax authority, which is typically 10 years.
What are the consequences of non-compliance?
Considering the general obligation to issue e-invoices in the B2G sector, it is possible to identify four main legal consequences for non-compliance with this legal obligation:
Judicial fulfilment of the obligation: an invoice that does not comply with B2G e-invoicing rules is in breach of a legal obligation and the issuer may be required to fulfil this obligation by judicial means.
Non-payment of the invoice: the public contractor must refuse to pay a non-compliant invoice since this constitutes a violation of rules applicable to the payment of public expenditure.
Inability to demand payment: the supplier will not be able to demand the fulfilment of the contract by the debtor since the established legal form has not been observed.
Non-performance of the contract: if the contract also includes the legal obligation to issue and receive e-invoices in CIUS-PT, non-compliance may lead to an additional breach of contract and the application of contractual sanctions. Ultimately, it may also result in contract cancellation and impede participation in future public procurement processes.
When do companies need to comply with B2G e-invoicing in Portugal?
All public administration entities are currently obligated to receive e-invoices in the structured CIUS-PT format. Additionally, all large company suppliers to the public administration must issue e-invoices in the same format.
Once again, the obligation for small, medium and microenterprises was postponed in 2025 and is now poised to enter into force on 1 January 2026.
Until then, micro, small and medium-sized companies can use invoicing mechanisms other than e-invoicing in the structured CIUS-PT schema when contracting with the Public Administration.
The law was published in the Official Gazette, whose purpose is to regulate the mandatory use of electronic invoicing in the Dominican Republic, including the establishment of the electronic invoicing tax system and its characteristics, optimisation results and contingencies, as well as the entry periods and tax facilities that taxpayers who take advantage of this system will be granted.
The law includes a Chapter on the Criminal and Tax infractions and penalties for non-compliance and still allows using paper invoices for certain contingencies.
Scope of application for e-invoicing in the Dominican Republic
The law applies to natural and legal persons, public or private. It’s also applicable to entities without legal personality domiciled in the Dominican Republic that carry out the transfer of goods, delivery in use or provision and lease of services for consideration or free of charge.
Recognition and authorisation
All electronic invoice issuers in the country shall:
Be recognised and authorised as such by the General Directorate of Internal Taxes (DGII)
Have a digital certificate for Tax Procedure, issued and signed digitally, by a certification entity authorised by the Dominican Institute of Telecommunications (INDOTEL).
The requirement for holographic or handwritten signatures and commercial seals for electronic invoices is fulfilled by using digital signatures supported by a digital certificate.
Electronic invoices cannot be modified once signed digitally and sent to the DGII.
Validation of the electronic invoice in the Dominican Republic
The electronic invoice must comply with the standard format established by the tax authority, which will be validated by computer systems. E-invoices will only be admissible when they comply with this validation.
Electronic invoices will be sent to the authority and the electronic receiver through electronic applications connected to the internet and in an XML file.
The electronic invoice will have a Printed Representation (RI) of the E-CF which will be delivered as a physical document to non-electronic receivers in exceptions. Otherwise, it will be delivered to electronic receivers when they are in contingency so that they can prove and report purchase transactions to the authority and third parties – as well as support tax credit or consumption, and keep the indicated documents as established by current legislation.
The General Directorate of Internal Taxes (DGII) will be the competent authority for validating and certifying the content and integrity of the electronic invoice.
Dominican Republic: Electronic Invoicing Tax System
The Electronic Invoicing Tax System is administered by the DGII and will be used to validate and accredit all electronic tax receipts resulting from electronic invoices. It will also validate legal forms or electronic tax documents that modify them and that serve as support to back up expenses and tax credits.
The DGII is also responsible for ensuring the integrity of information that is sent instantly for validation and the accreditation of electronic tax receipts (E-CF).
Issuance, conservation, types and sequence of electronic tax receipts
The three forms of Issuance of Electronic Tax Receipts (E-CF) are as follows:
Self-developed systems: The DGII will authorise taxpayers who wish to join electronic invoicing through its own development system, if they meet the requirements established for the issuance and receipt of E-CF
Electronic invoicing service providers: The taxpayer may implement an electronic invoicing system through a service provider that has been certified in compliance with the current regulations established by the DGII
Free billing: The DGII will have a free technological facility for issuing electronic tax receipts, aimed at taxpayers who meet the criteria defined for the use of this tool and dictated by the means established by the DGII
Online validation
The electronic tax receipts sent to the DGII will be validated online through the information system, according to the schemes published by the technical documentation and complementary standards that define their structure and behaviour.
Once they’ve been compared and validated against the criteria, the DGII will respond by delivering a response number identified as “trackID” with which the E-CF issuer can consult the document’s status.
Types of electronic tax receipt (E-CF) or electronic tax documents
There are 10 types of electronic tax receipts or documents as part of the law. These include:
Electronic Tax Credit Invoice
Electronic Consumption Bill
Electronic Debit Note
Electronic Credit Note
Electronic Voucher for Special Regimes
Electronic Government Receipt
Electronic Proof of Purchase
Electronic Receipt for Small Expenses
Electronic Receipt for Foreign Payments
Electronic Proof for Exports
Sequence of electronic tax receipts
All E-CFs must have an electronic tax receipt number (E-NCF), authorised by the DGII, which consists of an alphanumeric sequence.
The number and type of electronic tax receipt numbers will be authorised according to the economic activity registered in the National Taxpayer Registry (RNC), operational volume, and level of compliance of the taxpayer – as well as the risk profile of the taxpayer, in accordance with the parameters established by the DGII.
Duties of Electronic Issuers
The duties required of electronic issues, in order, consist of:
Sign all E-CFs issued with a valid Digital Certificate
Receive all E-CFs from their suppliers that are validly issued
Comply with the technical requirements that the DGII provides
To exhibit all the information that the DGII requires
Keep the E-CF in accordance with the provisions of the Tax Code
Standard format for the structure
The standard format for the structure of E-CFs is as follows:
Document identification data
Data relating to the Electronic Issuer
Data relating to the Electronic Receiving Buyer
Data relating to the good or service traded
Data relating to the value of the transaction
Tax data
Date and time of the digital signature
Digital signature
Taxpayers must indicate data that modifies or affects electronic tax receipts of credit and debit notes.
Implementation schedule for e-invoicing in the Dominican Republic
Large national taxpayers: 12 months from the law’s entry into force (18 May 2024).
Large local and medium-sized taxpayers: 24 months from the law’s entry into force (18 May 2025).
Small, micro and unclassified taxpayers: 36 months from the law’s entry into force (18 May 2026).
The DGII will publish the list of taxpayers required by law to issue E-CF. With the approval of the DGII, taxpayers may agree to extend the deadline for compliance with electronic invoicing regulations.
Voluntary period and incentives
A voluntary period is provided for all taxpayers who wish to be issuers of electronic invoices before implement the previous calendar. The DGII is providing incentives consisting of tax credits for MIPYMES and Large National Taxpayers.
Looking for further information on e-invoicing in the Dominican Republic? Contact our expert team.
